We have been studying the mechanism of protein folding carried out by chaperone proteins. We have been using an in vitro system that replicates DNA carrying the plasmid P1 origin of replication as a model system to study the function of three E. coli heat shock proteins, DnaJ, DnaK (the Hsp70 homologue), and GrpE. We found that DnaJ and DnaK, in an ATP- dependent reaction, activate the sequence specific DNA binding of the P1 initiator protein, RepA, by converting RepA dimers to monomers. The monomer form binds avidly to oriP1 DNA. Furthermore, RepA monomers bypass the requirement for GrpE as well as for DnaJ and DnaK in in vitro complementation assays with crude extracts of dnaJ, dnaK, and grpE mutant cells without the addition of purified heat shock proteins. Thus, the sole function of DnaJ, DnaK, and GrpE in plasmid P1 DNA replication is to convert RepA dimers to monomers. We have recently found reaction conditions that mimic the physiological situation. GrpE function is absolutely necessary for RepA activation in vitro with DnaJ and DnaK when the free Mg2+ concentration is maintained at a level of about l micromole by a metal ion buffer system. EDTA or physiological metabolites, including citrate, phosphate, pyrophosphate and ATP, all elicit the GrpE requirement. With these metal ion buffering systems, GrpE specifically lowers the concentration of Mg2+ required for the RepA activation reaction. The absence of Mg2+ blocks activation and high levels of Mg2+ in solution bypass the requirement for GrpE but not for the other two heat shock proteins. Our results imply that GrpE facilitates the utilization of Mg2+ for an essential step in RepA activation.